TIDMBRAM
RNS Number : 6446Q
Brammer PLC
06 August 2010
2010 INTERIM RESULTS
STRATEGY DRIVES CONTINUED MARKET SHARE GAINS
Brammer plc, the leading pan European added value technical distributor, today
announces its results for the six months ended 30 June 2010.
+----------------------------------------+-------------+-----------+--------+
| FINANCIAL SUMMARY |
+---------------------------------------------------------------------------+
| | 6 months to | 6 months | |
| | | to | |
+----------------------------------------+-------------+-----------+--------+
| | 30 June | 30 June | Change |
| | 2010 | 2009 | |
+----------------------------------------+-------------+-----------+--------+
| | | | |
+----------------------------------------+-------------+-----------+--------+
| | GBPm | GBPm | |
+----------------------------------------+-------------+-----------+--------+
| | | | |
+----------------------------------------+-------------+-----------+--------+
| Revenue | 230.0 | 216.3 | +6.3% |
+----------------------------------------+-------------+-----------+--------+
| Operating profit (pre amortisation and | 11.0 | 8.8 | +25% |
| exceptional items) | | | |
+----------------------------------------+-------------+-----------+--------+
| Profit before tax (pre amortisation | 9.7 | 6.0 | +60% |
| and exceptional items) | | | |
+----------------------------------------+-------------+-----------+--------+
| Profit / (loss) before tax | 9.0 | (2.6) | |
+----------------------------------------+-------------+-----------+--------+
| Net debt | (40.2) | (69.4) | |
+----------------------------------------+-------------+-----------+--------+
| Earnings per share | pence | pence | |
+----------------------------------------+-------------+-----------+--------+
| | | as | |
| | | restated* | |
+----------------------------------------+-------------+-----------+--------+
| Basic - before amortisation and | 6.4 | 5.7 | +12.3% |
| exceptional items | | | |
+----------------------------------------+-------------+-----------+--------+
| Basic | 5.9 | (2.4) | |
+----------------------------------------+-------------+-----------+--------+
| Diluted | 5.9 | (2.4) | |
+----------------------------------------+-------------+-----------+--------+
| | 2.10 | 1.84 | +14.1% |
| Dividend per share | | | |
| | | | |
+----------------------------------------+-------------+-----------+--------+
* comparative figures for dividends and earnings per share have been restated to
reflect the
effect of a 1 for 1 rights issue completed in November 2009.
Highlights
* Overall revenue up by 8.1% in constant currency, with 15.4% achieved in the
second quarter.
* Focus on key growth drivers of Key Accounts (up 15.7%) and Insites (up 23.4%)
enabled continued market share growth.
* Seven new pan-European contracts and twenty-one new Insites were gained and
the pipeline remains strong.
* Operating profit (pre amortisation and exceptional items) increased by 25% to
GBP11.0 million (2009: GBP8.8 million).
* Profit before tax (pre amortisation and exceptional items) up 60% to GBP9.7
million.
* Net debt was broadly unchanged at GBP40.2 million (2009 year end: GBP39.9
million).
* EPS (before amortisation and exceptional items) improved to 6.4p (2009: 5.7p
as restated for the effects of the rights issue in November 2009).
* Interim dividend increased to 2.10p per share (2009: 1.84p as restated for the
effect of the rights issue).
David Dunn, Chairman, said:
"Brammer has enjoyed a strong start to the year with our performance continuing
to vindicate our strategy of focusing on our key growth drivers, and the work
done in 2009 to reduce costs. These results also demonstrate our ability to
grow in what are still generally weak economic conditions. We believe all of
the principles of our strategy remain sound and we have a growing conviction
that higher levels of organic growth are attainable.
As we move into the second half of the year we remain cautiously optimistic of a
continuation of the first half growth trends. The low point in the recent
economic cycle occurred for Brammer in mid-2009. Whilst economic conditions have
undoubtedly improved since then, there is still a need to adopt a prudent view.
We will continue to drive for further profitable growth whilst maintaining tight
control of our costs and working capital. We believe a continuation of these
principles will provide a satisfactory result for the full year. Brammer has
only around 3% of the market and we expect to continue to enjoy a sales
performance which betters the market as we capitalise on our leadership
position."
+----------------+------------------------+----------------------------+
| Enquiries: | Brammer plc | 020 7638 9571 (8.00am - |
| | | 1.00pm) |
+----------------+------------------------+----------------------------+
| | | 0161 902 5572 (1.00pm - |
| | | 4.30pm) |
+----------------+------------------------+----------------------------+
| | David Dunn, chairman | |
+----------------+------------------------+----------------------------+
| | Ian Fraser, chief | |
| | executive | |
+----------------+------------------------+----------------------------+
| | Paul Thwaite, finance | |
| | director | |
+----------------+------------------------+----------------------------+
| | | |
+----------------+------------------------+----------------------------+
| Issued: | Citigate Dewe Rogerson | 020 7638 9571 |
| | Ltd | |
+----------------+------------------------+----------------------------+
| | Martin Jackson | |
+----------------+------------------------+----------------------------+
| | Kate Lehane | |
+----------------+------------------------+----------------------------+
BRAMMER PLC
2010 INTERIM RESULTS
CHAIRMAN'S STATEMENT
Overview
Since issuing the 2009 Annual Report in March of this year Brammer has issued an
interim management report on 18 May and most recently a trading update on 9
July. In both of those reports we announced an improving trend in the company's
trading and this is now confirmed in our results for the first six months of
2010. Trading conditions have gradually benefited from increased economic
activity and whilst still somewhat lower than the 2007/08 period, represent a
welcome return to normality. Brammer has continued to implement its stated
strategy and the benefit of this is reflected in our results.
Trading
Sales at GBP230.0 million were 6.3% higher than for the same period in 2009.
Excluding currency, the like for like increase was 8.1% albeit that 2010
included one additional working day. Importantly, the 'sales per working day'
analysis indicates a month by month improvement during 2010: whilst the first
quarter was comparable overall to the previous year, the second was 14.3%
higher. The growth momentum has been clearly re-established during this period.
Key Accounts were again a cornerstone, growing by 15.7% with seven new accounts
being won in the first half. Encouragingly, the pipeline of potential new
accounts remains strong. Insites also grew significantly with sales growth of
23.4%. Brammer's key growth drivers continue to demonstrate the benefit of our
strategy. We also believe a clear focus on the more resilient market sectors is
beneficial and it is interesting to note that Food and Drink is now our largest
single market sector.
Gross margins have been stable in the period despite pressure from Key Accounts
and new products. Following last year's cost reductions ongoing sales,
distribution and administrative costs increased by 2.6% in the first six months
largely reflecting a reduction in short time working and the re-establishment of
performance-based incentive accruals which in 2009 were zero.
The resultant trading profit (before amortisation and exceptional items) is
GBP11.0 million compared to GBP8.8 million last year, an increase of 25%. Pre
tax profits, before amortisation and exceptional items, grew by 60% to GBP9.7
million through a combination of the improved trading, tight cost control and
lower interest costs, the latter benefiting from the successful rights issue
completed in November 2009 and significantly lower inventory.
The net debt figure at 30 June was GBP40.2 million which was broadly similar to
the 2009 year end. The 2010 figure includes a favourable currency movement of
GBP4.1 million but is after payment in the period of GBP4.8 million of deferred
consideration relating to previous years' acquisitions and GBP1.3 million of
restructuring costs that were part of the exceptional charge in 2009.
Strategy
These results demonstrate the benefits of all of the hard work undertaken in
2009 on reducing cost and strengthening the balance sheet. They also demonstrate
our ability to grow in what are still generally weak economic conditions. The
Board have recently conducted a detailed review of strategy which was originally
devised in 2004 and concluded all of the principles remain sound with a growing
conviction that higher levels of organic growth are attainable. This is based on
the results we have achieved, the pipeline of new opportunities, and the massive
potential to penetrate further the very large and fragmented markets which we
serve. We will remain vigilant to appropriate acquisition opportunities but with
our unique footprint in Europe there is a real conviction that we still have a
long way to go in exploiting the organic potential. We have a strong and stable
management team which is more than capable of realising this potential in the
years ahead.
Dividend
The interim dividend recommended by the Board is 2.10p, an increase of 14.1%
over last year (1.84p as restated to reflect the effect of the rights issue).
This will be paid on 3 November to shareholders on the register at the close of
business on 8 October 2010.
Prospects
Brammer has enjoyed a strong start to the year with our performance continuing
to vindicate our strategy of focusing on our key growth drivers, and the work
done in 2009 to reduce costs. As we move into the second half of the year we
remain cautiously optimistic of a continuation of the first half growth trends.
The low point in the recent economic cycle occurred for Brammer in mid-2009.
Whilst economic conditions have undoubtedly improved since then, there is still
a need to adopt a prudent view. We will continue to drive for further profitable
growth whilst maintaining tight control of our costs and working capital. We
believe a continuation of these principles will provide a satisfactory result
for the full year. Brammer has only around 3% of the market and we expect to
continue to enjoy a sales performance which betters the market as we capitalise
on our leadership position.
David Dunn
6 August 2010
CHIEF EXECUTIVE'S REVIEW
Overview
In the first half of 2010 it became evident that we had emerged from the
caliginous depths of the 2009 recession. We continued to see the improvement in
our markets which was evident in the second half of 2009, and believe we
continued to win market share by focusing on our key growth drivers of Key
Accounts, attacking attractive market segments, developing our Insite base, and
cross-selling.
We experienced good growth in almost all territories, and the growth trend
accelerated as the half progressed. In the first quarter, group sales were
level with the same period last year, whereas sales in the second quarter were
up 15.4% on last year. Gross margins at 30% were broadly flat, but
strengthening as the half went on. We kept tight control of costs, but needed
to reduce short time working as the growth rate improved, and we have accrued
for performance based incentives where there were none last year. As a result,
our ongoing sales, distribution and administrative ("SDA") cost base increased
by 2.6%. We continued our inventory reduction plans with inventory down by 9.8%
in constant currency terms compared with 30 June 2009, despite sales in June
being 19.6% up from a year earlier. Profit after interest, before amortisation
and exceptional items, increased by 60% to GBP9.7 million.
We have maintained our strong presence within Europe, retaining all our branch
network; our leadership position still only represents around 3% of the market,
and the dynamics of the industry, combined with Brammer's growth strategy, means
we are confident of continuing to enjoy a sales performance which betters the
market as consolidation continues. We are already benefiting from the economic
recovery, but remain cautious about the future until the economic uncertainties
facing us have lifted.
Operational Review
Brammer is the leading European supplier of technical components and related
services to the maintenance, repair and operations ("MRO") markets. In the
first half of 2010 revenues increased by 6.3% to GBP230.0 million (2009:
GBP216.3 million), the gross profit margin in percentage terms remained broadly
stable, and operating profit (before amortisation and exceptional items)
increased by 25% to GBP11.0 million (2009: GBP8.8 million). Operating margin
(operating profit before amortisation and exceptional items) increased to 4.8%
(2009: 4.1%). Cash generated from operating activities (before exceptional
items) was GBP5.7 million (2009: GBP18.4 million) or 52% of operating profit
(2009: 209%). The large cash inflow in the prior period reflected the
significant benefit from the special inventory reduction project. Return on
capital employed (based on operating profit before amortisation and exceptional
items) increased to 27.8% (2009: 21.4%).
In the UK, overall sales per working day ("SPWD") were up 5.8%. Gross margins
across categories remained stable, although overall were very slightly down
mainly due to product mix variations (higher growth in the new and lower margin
product groups of fluid power and tools), and costs were carefully managed,
resulting in operating profit growth of 17%. We continued to enjoy strong growth
in fluid power (up 13%) and tools and general maintenance (up 12.5%). New
contracts, Insites, and contract product range extensions included Severn Trent
Water, Yorkshire Water, Tarmac, Rexam and Allied Bakeries. Key Accounts in the
UK, representing over 55% of sales, grew by 11%. We won 4 new Insites and
increased sales through our 61 full-time Insites by over 15%. Sales to all
Insites (i.e. full-time Insites and part-time Insites - those locations where we
have several regular clinics with the customer's staff each week) grew by 14%
and we now operate at 178 locations. Good progress was made in the important
market segments of Food and Drink, Paper and Packaging, and Water and Power
generation, and we saw a good recovery in Automotive and Construction and
Aggregates.
In Germany SPWD on a constant currency basis grew by 4.3%, but this masks a
decline in SPWD of 6.5% in the first quarter and growth of 18.1% in the second
quarter. Operating profit increased by 5.9%. Key Account revenues increased by
15.7%, and we experienced good recovery in the Automotive sector. Particularly
good progress was made in Food and Drink (up 30.2%), Fast Moving Consumer Goods
("FMCG") (up 19.7%) and Utilities. New contracts won included WEPA, PMI, TI
Automotive, Michelin, YARA and Cargill. The mechanical power transmission
("MPT") product group grew by 23% suggesting continued market share gains,
whilst the recently introduced tools and general maintenance product range grew
by 27%. We won 4 Insites in the first half and now have 16 Insites in Germany
with Insite sales in the first half of 2010 up 30.3%.
In France, SPWD on a constant currency basis increased by 9.2%, with the first
quarter up 4.1% and the second quarter up 14.9%. Gross margin increased slightly
and operating profit increased by 100%. Key Account sales increased by 19.2%
with good performances from Food and Drink (up 18%, and now the largest sector),
Automotive (up 26.7%) and Industrial Machinery (up 9.8%). Our base MRO sales
increased by 2.9%, roughly in line with the market. New contracts were won with
Clemessy, La Boulangere, and SNOP. The recently launched tools and general
maintenance product range grew 73%, and now represents nearly 5% of total sales.
Insite sales grew by 28.7%, the number of Insites having increased to 22.
In Spain SPWD on a constant currency basis increased by 6.9%, with quarter one
flat and the second quarter up 14%. Gross margin increased by 1%, costs were
tightly controlled, and operating profit increased by 27.8%. Key Account sales
increased by 21%. New contracts were won with Nestle, Berlys and Europastry.
Insite sales growth was 22.8%, the number of Insites having risen to 14, and we
have identified a strong pipeline for future projects over the next 18 months.
Sales to the Food and Beverage sector grew by 10%. Tools and general
maintenance and hydraulics, both introduced last year, grew by 42% and 174%
respectively, and now represent 3.2% of sales.
Within Benelux, the Netherlands SPWD on a constant currency basis were up 8.4%.
We introduced 15 new product lines in the first half and expect these to
generate additional growth in the second half, including further investments in
the tools and general maintenance product range. MPT grew by 14%. Sales to the
Food and Drink segment grew significantly. In Belgium, SPWD in constant
currency increased by 1.7%, representing a decline of 6.3% in the first quarter
and an increase of 10.9% in the second. We won new contracts with TI Automotive,
Mora and Vandemoortele, and Key Account growth was 35.2%. Two new Insites were
started, and Insite sales grew by 86.7%. Food and Drink grew by 34% and now
represents 20% of total sales.
We saw excellent progress in Eastern Europe, with SPWD up 11.3%. Our Polish
business developed well, with SPWD up 12.9% driven by good Key Account
development with a number of Brammer European Key Accounts. In the Czech
Republic, overall SPWD growth was 14.5% (4.5% in the first quarter and 26.0% in
the second). New contracts were won with PMI and TI Automotive, and we started
our first Insite at PMI. Food and Drink grew by 58%, and Construction and
Aggregates by 144%. In Hungary, SPWD grew by 3.5%.
In our Developing Businesses, on a constant currency basis, overall SPWD grew by
15.2%. In Austria, SPWD declined by 10.9% in the first quarter but improved to
modest growth in the second quarter. In Italy we continued to develop our
relationship with Key Account customers and grew SPWD by 27.1% (40% in the
second quarter). Our Irish business progressed well with SPWD up 17.3%.
Strategy
Growth
The overall SPWD growth of 6.7% represented a first quarter performance flat on
2009, growth of 14.3% in the second quarter, and an exit growth rate in June of
17.6%. Key Accounts performed well (up 15.7%). We won seven new Key Account
contracts, and the pipeline remains strong.
We continued to focus our energies on defensive market segments and, within the
Key Account arena, Food and Drink grew by 25.1%, FMCG by 32.1%, Metals by 23%
and Packaging by 29.5% with Automotive staging a good recovery with growth of
29.2%, mitigating lower growth levels in the base business.
Costs/Synergies
We continued to develop closer relationships with strategic suppliers, and
increased the concentration of spend with those suppliers, leading to both cost
benefits and greater supplier marketing support.
Our Capital Employed Task Force ("CETF") was formed in 2008 in order to improve
the management of our inventory on a European basis with the objective of
increasing inventory turns and thereby reducing working capital. The combination
of Momasse, our best-practice demand forecasting and stock planning system, with
Brammer Inline, our intra-group trading system, and MDM, our master data
management system giving a unique reference code to each part on a European
basis, helped us achieve a further inventory reduction of around GBP3.0 million
in constant currency despite significantly higher sales. Inventory turns
improved from 4.0 times at the end of 2009, to 4.8 times at the end of the first
half. We are confident that inventory turns can continue to increase as we
manage more of our inventory on a pan-European basis.
MDM now contains over 2.8 million part numbers, and 5.3 million associated
feature values.
Capability
The focus of our people and organisational capability is on supporting our
growth. To that end, our pan-European Marketing team are rolling out updated
Market Segmentation material for the Food & Drink sectors and continued
implementation work and training on how to use our sector specific material
through a workshop programme with our central and eastern European businesses.
Through our pan-European Sales Team we continued our development of the Brammer
Manual for Insite Operations with this manual available in English, French,
German and Spanish.
In our developing businesses we have focused on strengthening the management
teams and training particularly in the value proposition and specialist
products.
Following feedback from our customer survey, we have continued work on
identifying the energy saving potential of manufacturing and process driven
companies in Europe. The conservative assessment remains that over EUR13 billion
of energy is wasted across Europe in the production processes. We have had great
support from some of our partner suppliers and have set up a research activity
with a German Technical Institute to identify how we can maximise the benefits
from this work. Due to significant potential savings identified we have now
decided to intensify our research work in 2010. This involves looking at a
wider range of industry sectors and working with some key customers and
suppliers to further enhance the Energy Audit process already defined during
2009. Development of the Energy Audit is continuing and will be finalised and
marketed to customers in the latter parts of 2010 and into 2011.
We continue to roll out our bespoke suite of Distributed Learning programmes
which is made available to our people in 8 languages electronically. In crucial
customer facing areas of the business the goal is to achieve 100% take up of the
two major foundation programmes, which explain the technical aspects of the
product range and the fundamental way the business works. These foundation
programmes have been rebuilt and will be relaunched during 2010 to provide an
enhanced learning experience.
Following our seventh annual internal survey we have analysed the responses by
region and by function for each of the larger countries in order to develop
detailed action plans which will be rolled out in the second half of the year.
The target is to maintain and enhance the excellent links between our strategy
and our people.
We have increased our use of the intranet for internal communications and we
have continued to produce 'One Brammer' Newsletters, with 2010 seeing the first
electronic version of this newsletter created and sent out to all of our people.
This newsletter, which is sent to each member of Brammer across Europe, informs
our people about developments, successes, activities, and matters that concern
them about our performance.
The Brammer European Council of employee representatives meets annually in June.
This forum facilitates communication between the Works Councils and Employee
Forums from each country in the group, ensuring that the concerns and issues
raised by our people can be listened and responded to.
The future
Our strategy is proving to be effective and is delivering market share gains.
We have a strong presence within Europe upon which to build, and are confident
that the continued application of our growth drivers will help us achieve growth
levels significantly greater than the market for many years to come.
Accordingly, as the recovery continues we are well positioned to take
significant advantage of the opportunities available.
Ian R Fraser
6 August 2010
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that this consolidated interim financial information has
been prepared in accordance with IAS 34 'Interim Financial Reporting' as
endorsed and adopted by the EU and that the interim management report includes a
fair review of the information required by:
a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the financial
year and their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the remaining six
months of the year; and
b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have materially affected the financial position or performance
of the entity during that period; and any changes in the related party
transactions described in the 2009 Annual Report.
At the date of this statement the directors holding office are those listed in
the group's 2009 Annual Report with the exception of the following changes in
the period: Mr P Forman resigned on 28 February 2010, and Mr C Irving-Swift was
appointed in January 2010 with effect from 1 March 2010.
On behalf of the Board
D Dunn
Chairman
P Thwaite
Finance director
6 August 2010
Brammer CONSOLIDATED INCOME STATEMENT
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | 6 months to | Year to 31 December 2009 |
| | | 30 June | (audited) |
| | | (unaudited) | |
+--------------------------+-------+-----------------------+---------------------------------------+
| | | 2010 | 2009 | Pre | Exceptional | Total |
| | | | | exceptional | items | |
| | | | | items | (note 3) | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | Notes | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Continuing operations | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Revenue | 2 | 229,988 | 216,325 | 426,093 | - | 426,093 |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Cost of sales | | (160,940) | (150,889) | (298,039) | (2,560) | (300,599) |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Gross profit | | 69,048 | 65,436 | 128,054 | (2,560) | 125,494 |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Distribution costs | | (58,071) | (56,610) | (109,610) | (10,367) | (119,977) |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Amortisation of acquired | | (633) | (594) | (1,641) | - | (1,641) |
| intangibles | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Exceptional items | 3 | - | (8,006) | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Total sales distribution | | (58,704) | (65,210) | (111,251) | (10,367) | (121,618) |
| and administrative costs | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Operating profit | 2 | 10,344 | 226 | 16,803 | (12,927) | 3,876 |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Operating profit before | | 10,977 | 8,826 | 18,444 | - | 18,444 |
| amortisation and | | | | | | |
| exceptional items | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Amortisation of acquired | | (633) | (594) | (1,641) | - | (1,641) |
| intangibles | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Exceptional items | | - | (8,006) | - | (12,927) | (12,927) |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Operating profit | | 10,344 | 226 | 16,803 | (12,927) | 3,876 |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Finance expense | | (1,335) | (2,840) | (4,679) | (753) | (5,432) |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Finance income | | 25 | 55 | 63 | - | 63 |
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Profit / (loss) before | | 9,034 | (2,559) | 12,187 | (13,680) | (1,493) |
| tax | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Profit / (loss) before | | 9,667 | 6,041 | 13,828 | (13,680) | 148 |
| tax before amortisation | | | | | | |
| and exceptional items | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Amortisation of acquired | | (633) | (594) | (1,641) | - | (1,641) |
| intangibles | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Exceptional items | | - | (8,006) | - | - | - |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Profit / (loss) before | | 9,034 | (2,559) | 12,187 | (13,680) | (1,493) |
| tax | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Taxation | 4 | (2,726) | 782 | (3,007) | 4,081 | 1,074 |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Profit / (loss) for the | | 6,308 | (1,777) | 9,180 | (9,599) | (419) |
| period from continuing | | | | | | |
| operations | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Discontinued operations | 3 | - | - | - | 477 | 477 |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Profit / (loss) for the | | 6,308 | (1,777) | 9,180 | (9,122) | 58 |
| period | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Earnings per share | | | | | | |
| - total | | | | | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Basic | 5 | 5.9p | (2.4)p | | | 0.1p |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Diluted | 5 | 5.9p | (2.4)p | | | 0.1p |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| | | | |
+----------------------------------------------------------+-------------+-------------+-----------+
| - from continuing operations before | | | |
| amortisation and exceptional items | | | |
+----------------------------------------------------------+-------------+-------------+-----------+
| Basic | 5 | 6.4p | 5.7p | 13.1p | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| Diluted | 5 | 6.4p | 5.7p | 13.1p | | |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
| |
| |
| The notes on pages 15 to 24 form an integral part of this consolidated |
| interim financial information. |
| The comparative results for the periods to June 2009 and December 2009 are |
| presented as published. |
+--------------------------+-------+-----------+-----------+-------------+-------------+-----------+
Brammer CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+------------------------------------+-------------+-------------+-----------+
| | 6 months | 6 months | Year to |
| | to | to | |
+------------------------------------+-------------+-------------+-----------+
| | 30 June | 30 June | 31 |
| | 2010 | 2009 | December |
| | | | 2009 |
+------------------------------------+-------------+-------------+-----------+
| | (unaudited) | (unaudited) | (audited) |
| | | | |
+------------------------------------+-------------+-------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
| | | | |
+------------------------------------+-------------+-------------+-----------+
| | | | |
+------------------------------------+-------------+-------------+-----------+
| Profit/(loss) for the period | 6,308 | (1,777) | 58 |
+------------------------------------+-------------+-------------+-----------+
| | | | |
+------------------------------------+-------------+-------------+-----------+
| Other comprehensive income | | | |
+------------------------------------+-------------+-------------+-----------+
| Net exchange differences on | (4,215) | (5,725) | (4,627) |
| translating foreign operations | | | |
+------------------------------------+-------------+-------------+-----------+
| Actuarial losses on retirement | (1,824) | (5,790) | (10,047) |
| benefit obligations | | | |
+------------------------------------+-------------+-------------+-----------+
| | | | |
+------------------------------------+-------------+-------------+-----------+
| Other comprehensive expense for | (6,039) | (11,515) | (14,674) |
| the period, net of tax | | | |
+------------------------------------+-------------+-------------+-----------+
| | | | |
+------------------------------------+-------------+-------------+-----------+
| Total comprehensive | 269 | (13,292) | (14,616) |
| income/(expense) for the period | | | |
+------------------------------------+-------------+-------------+-----------+
The notes on pages 15 to 24 form an integral part of this consolidated interim
financial information.
Brammer CONSOLIDATED BALANCE SHEET
+-----------------------------+--------+-------------+-------------+-----------+
| | | 30 June | 30 June | 31 Dec |
| | | 2010 | 2009 | 2009 |
+-----------------------------+--------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (audited) |
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| | Notes | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+--------+-------------+-------------+-----------+
| Assets | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Non-current assets | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Goodwill | 6 | 71,426 | 72,793 | 76,570 |
+-----------------------------+--------+-------------+-------------+-----------+
| Acquired intangible assets | 6 | 5,600 | 7,156 | 6,617 |
+-----------------------------+--------+-------------+-------------+-----------+
| Other intangible assets | 6 | 4,065 | 4,686 | 4,556 |
+-----------------------------+--------+-------------+-------------+-----------+
| Property, plant and | 7 | 11,300 | 13,563 | 12,533 |
| equipment | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Deferred tax assets | | 7,751 | 5,990 | 8,245 |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| | | 100,142 | 104,188 | 108,521 |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Current assets | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Inventories | | 63,698 | 71,976 | 70,772 |
+-----------------------------+--------+-------------+-------------+-----------+
| Trade and other receivables | | 79,707 | 73,841 | 71,218 |
+-----------------------------+--------+-------------+-------------+-----------+
| Cash and cash equivalents | 8 | 19,935 | 30,615 | 33,272 |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| | | 163,340 | 176,432 | 175,262 |
+-----------------------------+--------+-------------+-------------+-----------+
| Liabilities | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Current liabilities | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Financial liabilities - | 8 | (4,002) | (6,399) | (6,248) |
| borrowings | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Trade and other payables | | (83,387) | (83,666) | (82,305) |
+-----------------------------+--------+-------------+-------------+-----------+
| Provisions | 9 | (655) | - | (2,156) |
+-----------------------------+--------+-------------+-------------+-----------+
| Deferred consideration | | (3,789) | (9,169) | (7,880) |
+-----------------------------+--------+-------------+-------------+-----------+
| Current tax liabilities | | (2,917) | (2,556) | (761) |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| | | (94,750) | (101,790) | (99,350) |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Net current assets | | 68,590 | 74,642 | 75,912 |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Non-current liabilities | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Financial liabilities - | 8 | (56,176) | (93,584) | (66,898) |
| borrowings | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Deferred tax liabilities | | (7,252) | (7,815) | (8,856) |
+-----------------------------+--------+-------------+-------------+-----------+
| Provisions | 9 | (407) | (3,962) | (325) |
+-----------------------------+--------+-------------+-------------+-----------+
| Deferred consideration | | (6,569) | (9,830) | (7,742) |
+-----------------------------+--------+-------------+-------------+-----------+
| Retirement benefit | 10 | (26,937) | (20,547) | (25,668) |
| obligations | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| | | (97,341) | (135,738) | (109,489) |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Net assets | | 71,391 | 43,092 | 74,944 |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Shareholders' equity | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Share capital | 11 | 21,257 | 10,629 | 21,257 |
+-----------------------------+--------+-------------+-------------+-----------+
| Share premium | | 18,092 | 18,092 | 18,092 |
+-----------------------------+--------+-------------+-------------+-----------+
| Translation reserve | | 1,169 | 4,286 | 5,384 |
+-----------------------------+--------+-------------+-------------+-----------+
| Retained earnings | | 30,873 | 10,085 | 30,211 |
+-----------------------------+--------+-------------+-------------+-----------+
| | | | | |
+-----------------------------+--------+-------------+-------------+-----------+
| Total equity | | 71,391 | 43,092 | 74,944 |
+-----------------------------+--------+-------------+-------------+-----------+
The notes on pages 15 to 24 form an integral part of this consolidated interim
financial information.
Brammer CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+-------------------------+---------+---------+----------+-------------+----------+----------+
| | Share | Share | Treasury | Translation | Retained | |
| | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| | Capital | Premium | Shares | reserve | Earnings | Total |
| | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Balance at 1 January | 10,590 | 18,092 | (627) | 10,011 | 21,024 | 59,090 |
| 2009 | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Loss for the period | - | - | - | - | (1,777) | (1,777) |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Other comprehensive | - | - | - | (5,725) | (5,790) | (11,515) |
| income | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Total comprehensive | - | - | - | (5,725) | (7,567) | (13,292) |
| income | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Transactions with | | | | | | |
| owners | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Shares issued during | 39 | - | - | - | - | 39 |
| the period | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Purchase of own shares | - | - | (181) | - | - | (181) |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Transfer on vesting of | - | - | 665 | - | (665) | - |
| own shares | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Value of employee | - | - | - | - | 137 | 137 |
| services | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Dividends | - | - | - | - | (2,701) | (2,701) |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Total transactions with | 39 | - | 484 | - | (3,229) | (2,706) |
| owners | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Movement in period | 39 | - | 484 | (5,725) | (10,796) | (15,998) |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| At 30 June 2009 | 10,629 | 18,092 | (143) | 4,286 | 10,228 | 43,092 |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Profit for the period | - | - | - | - | 1,835 | 1,835 |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Other comprehensive | - | - | - | 1,098 | (4,257) | (3,159) |
| income | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Total comprehensive | - | - | - | 1,098 | (2,422) | (1,324) |
| income | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Transactions with | | | | | | |
| owners | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Shares issued in | | | | | | |
| respect of | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| the rights issue | 10,628 | - | - | - | 24,677 | 35,305 |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Purchase of own shares | - | - | (120) | - | - | (120) |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Transfer on vesting of | - | - | 15 | - | (15) | - |
| own shares | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Tax on share option | - | - | - | - | 201 | 201 |
| schemes | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Value of employee | - | - | - | - | (833) | (833) |
| services | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Dividends | - | - | - | - | (1,377) | (1,377) |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Total transactions with | 10,628 | - | (105) | - | 22,653 | 33,176 |
| owners | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Movement in period | 10,628 | - | (105) | 1,098 | 20,231 | 31,852 |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| At 31 December 2009 | 21,257 | 18,092 | (248) | 5,384 | 30,459 | 74,944 |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Profit for the period | - | - | - | - | 6,308 | 6,308 |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Other comprehensive | - | - | - | (4,215) | (1,824) | (6,039) |
| income | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Total comprehensive | - | - | - | (4,215) | 4,484 | 269 |
| income | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Transactions with | | | | | | |
| owners | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Purchase of own shares | - | - | (6) | - | - | (6) |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Transfer on vesting of | - | - | 12 | - | (12) | - |
| own shares | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Dividends | - | - | - | - | (3,816) | (3,816) |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Total transactions with | - | - | 6 | - | (3,828) | (3,822) |
| owners | | | | | | |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| Movement in period | - | - | 6 | (4,215) | 656 | (3,553) |
+-------------------------+---------+---------+----------+-------------+----------+----------+
| At 30 June 2010 | 21,257 | 18,092 | (242) | 1,169 | 31,115 | 71,391 |
+-------------------------+---------+---------+----------+-------------+----------+----------+
Retained earnings as disclosed in the Balance Sheet on page 12 represent the
retained earnings and treasury shares balances above.
The notes on pages 15 to 24 form an integral part of this consolidated interim
financial information.
Brammer CONSOLIDATED CASH FLOW STATEMENT
+--------------------------------------+-------------+-------------+-----------+
| | 6 months | 6 months | Year to |
| | to | to | |
+--------------------------------------+-------------+-------------+-----------+
| | 30 June | 30 June | |
| | 2010 | 2009 | 31 Dec |
| | | | 2009 |
+--------------------------------------+-------------+-------------+-----------+
| | (unaudited) | (unaudited) | (audited) |
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Profit/(loss) for the period | 6,308 | (1,777) | 58 |
+--------------------------------------+-------------+-------------+-----------+
| Tax charge/(credit) on continuing | 2,726 | (782) | (1,074) |
| operations | | | |
+--------------------------------------+-------------+-------------+-----------+
| Tax charge on discontinued | - | - | 185 |
| operations | | | |
+--------------------------------------+-------------+-------------+-----------+
| Depreciation and amortisation of | 2,835 | 2,952 | 6,634 |
| tangible and intangible assets | | | |
+--------------------------------------+-------------+-------------+-----------+
| Share options - value of employee | - | 137 | (696) |
| services | | | |
+--------------------------------------+-------------+-------------+-----------+
| Gain on sale of property, plant and | (24) | (99) | (133) |
| equipment | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net financing expense | 1,310 | 2,785 | 4,616 |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Movement in working capital | (8,744) | 10,491 | 17,729 |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Cash generated from operating | 4,411 | 13,707 | 27,319 |
| activities | | | |
+--------------------------------------+-------------+-------------+-----------+
| Cash generated from operating | 5,718 | 18,428 | 33,349 |
| activities before exceptional items | | | |
+--------------------------------------+-------------+-------------+-----------+
| Cash outflow from exceptional items | (1,307) | (4,721) | (6,030) |
+--------------------------------------+-------------+-------------+-----------+
| Cash generated from operating | 4,411 | 13,707 | 27,319 |
| activities | | | |
+--------------------------------------+-------------+-------------+-----------+
| Interest received | 25 | 55 | 63 |
+--------------------------------------+-------------+-------------+-----------+
| Interest paid | (1,068) | (3,903) | (5,964) |
+--------------------------------------+-------------+-------------+-----------+
| Tax paid | (748) | (817) | (2,333) |
+--------------------------------------+-------------+-------------+-----------+
| Decrease in pension obligations | (1,113) | (794) | (1,542) |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net cash generated from operating | 1,507 | 8,248 | 17,543 |
| activities | | | |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Cash flows from investing activities | | | |
+--------------------------------------+-------------+-------------+-----------+
| Deferred consideration paid on prior | (4,503) | (3,278) | (8,294) |
| acquisitions | | | |
+--------------------------------------+-------------+-------------+-----------+
| Earn-out paid on prior acquisitions | (327) | - | (506) |
+--------------------------------------+-------------+-------------+-----------+
| Proceeds from sale of property, | 97 | 498 | 906 |
| plant and equipment | | | |
+--------------------------------------+-------------+-------------+-----------+
| Purchase of property, plant and | (1,064) | (987) | (1,558) |
| equipment | | | |
+--------------------------------------+-------------+-------------+-----------+
| Additions to other intangible assets | (157) | (270) | (1,045) |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net cash used in investing | (5,954) | (4,037) | (10,497) |
| activities | | | |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Cash flows from financing activities | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net proceeds from issue of ordinary | - | 39 | 39 |
| share capital | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net proceeds from rights issue | - | - | 35,305 |
+--------------------------------------+-------------+-------------+-----------+
| Repayment of loans following rights | - | - | (16,355) |
| issue | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net (repayment)/issue of borrowings | (6,471) | 8,633 | (6,739) |
+--------------------------------------+-------------+-------------+-----------+
| Dividends paid to shareholders | - | - | (4,078) |
+--------------------------------------+-------------+-------------+-----------+
| Purchase of own shares | (6) | (181) | (301) |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net cash (used in)/generated from | (6,477) | 8,491 | 7,871 |
| financing activities | | | |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net (decrease)/increase in cash and | (10,924) | 12,702 | 14,917 |
| cash equivalents | | | |
+--------------------------------------+-------------+-------------+-----------+
| Exchange losses on cash and cash | (1,512) | (2,440) | (1,655) |
| equivalents | | | |
+--------------------------------------+-------------+-------------+-----------+
| Cash and cash equivalents at | 31,448 | 18,186 | 18,186 |
| beginning of period | | | |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net cash at end of period | 19,012 | 28,448 | 31,448 |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Cash and cash equivalents | 19,935 | 30,615 | 33,272 |
+--------------------------------------+-------------+-------------+-----------+
| Overdrafts | (923) | (2,167) | (1,824) |
+--------------------------------------+-------------+-------------+-----------+
| | | | |
+--------------------------------------+-------------+-------------+-----------+
| Net cash at end of period | 19,012 | 28,448 | 31,448 |
+--------------------------------------+-------------+-------------+-----------+
The notes on pages 15 to 24 form an integral part of this consolidated interim
financial information.
Brammer NOTES TO THE INTERIM FINANCIAL INFORMATION
1 STATUS OF INTERIM REPORT AND ACCOUNTING POLICIES
General information
Brammer plc is a company incorporated and domiciled in the UK, and listed on the
London Stock Exchange.
This consolidated interim financial information was approved for issue by a duly
appointed and authorised committee of the Board on 6 August 2010.
This consolidated interim financial information for the six months ended 30 June
2010 does not comprise statutory accounts within the meaning of Section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31 December 2009
were approved by the Board on 23 February 2010 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any statement under
section 498 of the Companies Act 2006.
The consolidated financial statements of the group for the year ended 31
December 2009 are available from the company's registered office or website
(www.brammer.biz).
This consolidated interim financial information is unaudited.
Basis of preparation
This consolidated interim financial information for the six months ended 30 June
2010 has been prepared in accordance with the Disclosure and Transparency Rules
of the Financial Services Authority and with IAS 34, "Interim Financial
Reporting" as adopted by the EU. The consolidated interim condensed financial
information should be read in conjunction with the annual financial statements
for the year ended 31 December 2009 which have been prepared in accordance with
IFRSs as adopted by the EU.
The financial information is presented in pounds sterling and has been prepared
on the historical cost basis.
The directors confirm that they have a reasonable expectation that the group has
adequate resources to enable it to continue in existence for the foreseeable
future and, accordingly, the consolidated interim financial information has been
prepared on a going concern basis. In forming its opinion as to going concern,
the Board prepares a cashflow forecast based upon its assumptions as to trading
and taking into account the banking facilities available to the group. The Board
also models a number of alternative scenarios, taking account of business
variables and key risks and uncertainties, and maintains under continuous review
the capital structure of the group and the financing options available to the
group.
Accounting policies
Except as described below, the principal accounting policies adopted in the
preparation of this interim financial information are included in the
consolidated financial statements for the year ended 31 December 2009. These
policies have been consistently applied to all the periods presented.
No standards have been early adopted by the group. The implications for the
group of new standards, amendments to standards or interpretations which are
mandatory for the first time for the financial year ending 31 December 2010 are
summarised below.
Taxes on income in the interim periods are accrued using the tax rate that would
be applicable to expected total annual earnings.
New standards, amendments to standards or interpretations
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial year beginning 1 January 2010:
IFRS 3 (revised), 'Business combinations' and consequential amendments to IAS
27, 'Consolidated and separate financial statements', IAS 28, 'Investments in
associates' and IAS 31, 'Interests in joint ventures', effective prospectively
to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after 1 July
2009.
The following new standards, amendments to standards and interpretations are
mandatory for the first time for the financial year beginning 1 January 2010 but
are not currently relevant for the group:
IFRIC 17, 'Distributions of non-cash assets to owners', effective for annual
periods beginning on or after 1 July 2009. This is not currently applicable to
the group, as it has not made any non-cash distributions.
IFRIC 18, 'Transfers of assets from customers', effective for transfers of
assets received on or after 1 July 2009. This is not relevant to the group, as
it has not received any assets from customers.
'Additional exemptions for first-time adopters' (Amendment to IFRS 1). The
amendments are required to be applied for annual periods beginning on or after 1
January 2010. This is not relevant to the group as it is an existing IFRS
preparer.
The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the financial year beginning 1 January
2010 and have not been early adopted:
IFRS 9, 'Financial instruments', effective for annual periods beginning on or
after 1 January 2013, though earlier adoption is permitted.The standard
addresses the classification and measurement of financial assets. This is not
currently relevant to the group.
Revised IAS 24, 'Related party disclosures', effective for annual periods
beginning on or after 1 January 2011, though earlier adoption is permitted.
Management do not currently expect this standard to result in additional
disclosures.
'Classification of rights issues' (Amendment to IAS 32), effective for annual
periods beginning on or after 1 February 2010, though earlier adoption is
permitted. This is not currently relevant to the group.
IFRIC 14 (amendment), 'Prepayments of a minimum funding requirement', effective
for annual periods beginning on or after 1 January 2011, though earlier
application is permitted. This is not currently relevant to the group as no
voluntary prepayment of minimum funding contributions in respect of future
service have been made.
IFRIC 19, 'Extinguishing financial liabilities with equity investments',
effective for annual periods beginning on or after 1 July 2010. This is not
relevant to the group as no equity instruments have been issued to extinguish
any financial liabilities.
Accounting estimates and judgements
The preparation of interim financial information requires management to make
judgements, estimates and assumptions that affect the application of accounting
policies and the reported amount of income, expense, assets and liabilities. The
significant estimates and judgements made by management were consistent with
those applied to the consolidated financial statements for the year ended 31
December 2009.
Risks and uncertainties
The principal strategic level risks and uncertainties affecting the group remain
those set out on pages 18 and 19 in the 2009 Annual Report.
The chairman's statement and chief executive's review in this interim report
include comments on the outlook for the remaining six months of the financial
year.
Forward-looking statements
This interim report contains forward-looking statements. Although the group
believes that the expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that these expectations will prove to have
been correct. Due to the inherent uncertainties, including both economic and
business risk factors underlying such forward-looking information, actual
results may differ materially from those expressed or implied by these
forward-looking statements.
The group undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.
2 SEGMENTAL ANALYSIS
The Board has been identified as the chief operating decision-maker. The Board
reviews the group's internal reporting as the basis for assessing performance
and allocating resources. Management has determined the operating segments based
on these reports. The group is primarily controlled on a country by country
basis, in line with the legal structure. The operating segments are unchanged
from those previously reported.
The group's internal reporting is primarily based on performance reports run at
'management' exchange rates - exchange rates which are set at the beginning of
each year. For 2010 the management rate used is EUR1.145 : GBP1.
Accordingly the segment information below is shown at the 'management' exchange
rates with the exchange effect being a reconciling item between the segment
results and the totals reported in the financial statements at actual exchange
rates. The management rate applies to income statement, balance sheet and cash
flows.
The Board assesses the performance of the operating segments based on their
underlying operating profit, which comprises profit before interest and
taxation, excluding amortisation of acquired intangibles and non-recurring or
exceptional items such as restructuring costs and impairments when the
impairment is the result of an isolated, non-recurring event.
Segment assets include property, plant and equipment, software development,
inventories, and trade and other receivables. All inter-segmental trading is at
an arms-length basis.
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | UK | Germany | France | Spain | Benelux | Eastern | Other | Total |
| | | | | | | Europe | operating | |
| | | | | | | | segments | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Six months | | | | | | | | |
| ended 30 June | | | | | | | | |
| 2010 | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Revenue | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total revenue | 70,227 | 51,769 | 38,915 | 20,411 | 23,009 | 23,303 | 8,442 | 236,076 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Inter company | (1,393) | (1,461) | (699) | (437) | (822) | (153) | (296) | (5,261) |
| sales | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Sales to | 68,834 | 50,308 | 38,216 | 19,974 | 22,187 | 23,150 | 8,146 | 230,815 |
| external | | | | | | | | |
| customers | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | (827) |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total sales to | | | | | | | | 229,988 |
| external | | | | | | | | |
| customers | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Underlying | 2,859 | 2,597 | 1,586 | 1,494 | 1,097 | 1,207 | 172 | 11,012 |
| operating | | | | | | | | |
| profit | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | (35) |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total | | | | | | | | 10,977 |
| underlying | | | | | | | | |
| operating | | | | | | | | |
| profit | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Amortisation | | | | | | | | |
| of acquired | | | | | | | | (633) |
| intangibles | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total | | | | | | | | 10,344 |
| operating | | | | | | | | |
| profit | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Finance | | | | | | | | (1,335) |
| expense | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Finance income | | | | | | | | 25 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Profit before | | | | | | | | 9,034 |
| tax | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Tax | | | | | | | | (2,726) |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Profit for the | | | | | | | | 6,308 |
| period | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Segment assets | 41,838 | 24,180 | 26,537 | 17,285 | 21,235 | 22,879 | 12,046 | 166,000 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | (7,230) |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total segment | | | | | | | | 158,770 |
| assets | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Goodwill | | | | | | | | 71,426 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Acquired | | | | | | | | 5,600 |
| intangibles | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Cash | | | | | | | | 19,935 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Deferred tax | | | | | | | | 7,751 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total assets | | | | | | | | 263,482 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Other segment | | | | | | | | |
| items | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Capital | 118 | 68 | 384 | 62 | 87 | 162 | 354 | 1,235 |
| expenditure | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | (14) |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total capital | | | | | | | | 1,221 |
| expenditure | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Amortisation | (639) | (159) | (154) | (216) | (261) | (244) | (533) | (2,206) |
| and | | | | | | | | |
| depreciation | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | 4 |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total | | | | | | | | (2,202) |
| amortisation | | | | | | | | |
| and | | | | | | | | |
| depreciation* | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
SEGMENTAL ANALYSIS (continued)
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | UK | Germany | France | Spain | Benelux | Eastern | Other | Total |
| | | | | | | Europe | operating | |
| | | | | | | | segments | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Six months | | | | | | | | |
| ended 30 June | | | | | | | | |
| 2009 | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Revenue | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total revenue | 65,864 | 48,805 | 34,774 | 18,934 | 21,613 | 20,923 | 7,192 | 218,105 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Inter company | (966) | (1,373) | (403) | (625) | (855) | (211) | (108) | (4,541) |
| sales | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Sales to | 64,898 | 47,432 | 34,371 | 18,309 | 20,758 | 20,712 | 7,084 | 213,564 |
| external | | | | | | | | |
| customers | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | 2,761 |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total sales to | | | | | | | | 216,325 |
| external | | | | | | | | |
| customers | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Underlying | 2,442 | 2,453 | 795 | 1,169 | 834 | 1,334 | (231) | 8,796 |
| operating | | | | | | | | |
| profit | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | 30 |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total | | | | | | | | 8,826 |
| underlying | | | | | | | | |
| operating | | | | | | | | |
| profit | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Amortisation | | | | | | | | |
| of acquired | | | | | | | | (594) |
| intangibles | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exceptional | | | | | | | | (8,006) |
| items | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total | | | | | | | | 226 |
| operating | | | | | | | | |
| profit | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Finance | | | | | | | | (2,840) |
| expense | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Finance income | | | | | | | | 55 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Loss before | | | | | | | | (2,559) |
| tax | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Tax | | | | | | | | 782 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Loss for the | | | | | | | | (1,777) |
| period | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Segment assets | 43,274 | 27,624 | 24,101 | 17,824 | 21,970 | 22,044 | 11,424 | 168,261 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | (4,195) |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total segment | | | | | | | | 164,066 |
| assets | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Goodwill | | | | | | | | 72,793 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Acquired | | | | | | | | 7,156 |
| intangibles | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Cash | | | | | | | | 30,615 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Deferred tax | | | | | | | | 5,990 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total assets | | | | | | | | 280,620 |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Other segment | | | | | | | | |
| items | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Capital | 230 | 99 | 51 | 126 | 385 | 140 | 221 | 1,252 |
| expenditure | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | 5 |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total capital | | | | | | | | 1,257 |
| expenditure | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Amortisation | (782) | (191) | (134) | (224) | (267) | (213) | (531) | (2,342) |
| and | | | | | | | | |
| depreciation | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Exchange | | | | | | | | (16) |
| effect | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
| Total | | | | | | | | (2,358) |
| amortisation | | | | | | | | |
| and | | | | | | | | |
| depreciation* | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+---------+-----------+----------+
* Total amortisation and depreciation excluding the amortisation of acquired
intangibles.
The table below details the 'management rate' used and the actual exchange rates
used for the primary exchange rate of Sterling to Euro for the current period
and the prior period:
+-------------------------------+----------------+----------------+
| | 30 June 2010 | 30 June 2009 |
+-------------------------------+----------------+----------------+
| Management rate | EUR1.145 | EUR1.145 |
+-------------------------------+----------------+----------------+
| Actual average rate | EUR1.153 | EUR1.113 |
+-------------------------------+----------------+----------------+
| Balance sheet rate | EUR1.221 | EUR1.174 |
+-------------------------------+----------------+----------------+
3 EXCEPTIONAL ITEMS
There were no exceptional items in the period ending 30 June 2010.
The exceptional charge of GBP8.0 million in the half year to 30 June 2009
and GBP12.9 million in the full year to 31 December 2009, recognised in
operating profit, comprised the costs of restructuring the group's operations to
align the group's cost base in response to the difficult market conditions. The
restructuring costs principally related to the termination of employment.
The utilisation of the restructuring provision held at 31 December 2009 is shown
in the provisions note below (note 9).
The GBP0.5 million credit relating to discontinued operations in the full year
2009 results comprised the release of a substantial part of the provision held
in respect of potential warranty claims. The amount was shown net of taxation on
the income statement.
4 TAXATION
The charge for taxation is recognised based on management's best estimate of the
weighted average annual corporate tax rate expected for the full financial year.
The estimated average annual tax rate used for 2010 is 30.2% (the estimated tax
rate for the first half year of 2009 was 30.6%).
5 EARNINGS PER SHARE
+---------------------------------------------+----------+----------+----------+
| | Half year 2010 |
+---------------------------------------------+--------------------------------+
| | | Earnings per |
| | | share |
+---------------------------------------------+----------+---------------------+
| | Earnings | Basic | Diluted |
| | | | |
+---------------------------------------------+----------+----------+----------+
| | GBP'000 | | |
| | | | |
+---------------------------------------------+----------+----------+----------+
| Weighted average number of shares in issue | | 106,286 | 106,286 |
| ('000) | | | |
+---------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------+----------+----------+----------+
| Total - all continuing operations | | | |
+---------------------------------------------+----------+----------+----------+
| Profit for the period | 6,308 | 5.9p | 5.9p |
+---------------------------------------------+----------+----------+----------+
| Amortisation of acquired intangibles | 633 | | |
+---------------------------------------------+----------+----------+----------+
| Tax on amortisation of acquired intangibles | (160) | | |
+---------------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------------+----------+----------+----------+
| Earnings before amortisation of acquired | 6,781 | 6.4p | 6.4p |
| intangibles | | | |
+---------------------------------------------+----------+----------+----------+
+---------------------------------------------+----------+---------+---------+
| | Half year 2009 |
+---------------------------------------------+------------------------------+
| | | Earnings per |
| | | share |
+---------------------------------------------+----------+-------------------+
| | Earnings | Basic | Diluted |
| | | | |
+---------------------------------------------+----------+---------+---------+
| | GBP'000 | | |
| | | | |
+---------------------------------------------+----------+---------+---------+
| Adjusted weighted average number of shares | | 74,785 | 75,297 |
| in issue ('000)* | | | |
+---------------------------------------------+----------+---------+---------+
| | | | |
+---------------------------------------------+----------+---------+---------+
| Total - all continuing operations | | | |
+---------------------------------------------+----------+---------+---------+
| Loss for the period | (1,777) | (2.4)p | (2.4)p |
+---------------------------------------------+----------+---------+---------+
| Amortisation of acquired intangibles | 594 | | |
+---------------------------------------------+----------+---------+---------+
| Exceptional items | 8,006 | | |
+---------------------------------------------+----------+---------+---------+
| Tax on exceptional items | (2,426) | | |
+---------------------------------------------+----------+---------+---------+
| Tax on amortisation of acquired intangibles | (137) | | |
+---------------------------------------------+----------+---------+---------+
| | | | |
+---------------------------------------------+----------+---------+---------+
| Earnings before amortisation of acquired | 4,260 | 5.7p | 5.7p |
| intangibles and exceptional items | | | |
+---------------------------------------------+----------+---------+---------+
+---------------------------------------------+----------+---------+---------+
| | Full year 2009 |
+---------------------------------------------+------------------------------+
| | | Earnings per |
| | | share |
+---------------------------------------------+----------+-------------------+
| | Earnings | Basic | Diluted |
| | | | |
+---------------------------------------------+----------+---------+---------+
| | GBP'000 | | |
| | | | |
+---------------------------------------------+----------+---------+---------+
| Weighted average number of shares in issue | | 79,351 | 79,351 |
| ('000) | | | |
+---------------------------------------------+----------+---------+---------+
| | | | |
+---------------------------------------------+----------+---------+---------+
| Total | | | |
+---------------------------------------------+----------+---------+---------+
| - from continuing operations | (419) | (0.5)p | (0.5)p |
+---------------------------------------------+----------+---------+---------+
| - from discontinued operations | 477 | 0.6p | 0.6p |
+---------------------------------------------+----------+---------+---------+
| Profit for the financial year | 58 | 0.1p | 0.1p |
+---------------------------------------------+----------+---------+---------+
| Amortisation of acquired intangibles | 1,641 | | |
+---------------------------------------------+----------+---------+---------+
| Exceptional items | 13,018 | | |
+---------------------------------------------+----------+---------+---------+
| Tax on exceptional items | (3,896) | | |
+---------------------------------------------+----------+---------+---------+
| Tax on amortisation of acquired intangibles | (427) | | |
+---------------------------------------------+----------+---------+---------+
| | | | |
+---------------------------------------------+----------+---------+---------+
| Earnings before amortisation of acquired | 10,394 | 13.1p | 13.1p |
| intangibles and exceptional items | | | |
+---------------------------------------------+----------+---------+---------+
* The weighted average number of ordinary shares in issue in the half year 2009
prior period has been adjusted retrospectively for the bonus element of the
rights issue completed in November 2009. The half year 2009 comparative EPS
figures have been divided by 1.409836 to take account of the bonus element of
the rights issue.
6 INTANGIBLE ASSETS
+---------------------------------------+----------+-------------+-------------+
| | Goodwill | Acquired | Other |
| | | | -software |
| | | intangibles | development |
| | | | |
+---------------------------------------+----------+-------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
| | | | |
+---------------------------------------+----------+-------------+-------------+
| Cost | | | |
+---------------------------------------+----------+-------------+-------------+
| At 1 January 2010 | 76,570 | 9,945 | 12,064 |
+---------------------------------------+----------+-------------+-------------+
| Exchange adjustments | (5,471) | (624) | (512) |
+---------------------------------------+----------+-------------+-------------+
| Additions | 327 | - | 157 |
+---------------------------------------+----------+-------------+-------------+
| | | | |
+---------------------------------------+----------+-------------+-------------+
| At 30 June 2010 | 71,426 | 9,321 | 11,709 |
+---------------------------------------+----------+-------------+-------------+
+---------------------------------------+---------+--------+--------+
| Amortisation | | | |
+---------------------------------------+---------+--------+--------+
| At 1 January 2010 | - | 3,328 | 7,508 |
+---------------------------------------+---------+--------+--------+
| Exchange adjustments | - | (240) | (441) |
+---------------------------------------+---------+--------+--------+
| Charge for the period | - | 633 | 577 |
+---------------------------------------+---------+--------+--------+
| | | | |
+---------------------------------------+---------+--------+--------+
| At 30 June 2010 | - | 3,721 | 7,644 |
+---------------------------------------+---------+--------+--------+
+---------------------------------------+---------+--------+--------+
| Net book value | | | |
+---------------------------------------+---------+--------+--------+
| At 30 June 2010 | 71,426 | 5,600 | 4,065 |
+---------------------------------------+---------+--------+--------+
| At 31 December 2009 | 76,570 | 6,617 | 4,556 |
+---------------------------------------+---------+--------+--------+
Additions to goodwill reflect earn-out payments made during the period in
respect of prior period acquisitions.
7 PROPERTY, PLANT AND EQUIPMENT
+---------------------------------------+-----------+-----------+---------+
| | Land | Equipment | Total |
| | and | | |
| | Buildings | | |
| | | | |
+---------------------------------------+-----------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 |
| | | | |
+---------------------------------------+-----------+-----------+---------+
| Cost | | | |
+---------------------------------------+-----------+-----------+---------+
| At 1 January 2010 | 13,287 | 33,669 | 46,956 |
+---------------------------------------+-----------+-----------+---------+
| Exchange adjustments | (475) | (1,507) | (1,982) |
+---------------------------------------+-----------+-----------+---------+
| Additions | 75 | 989 | 1,064 |
+---------------------------------------+-----------+-----------+---------+
| Disposals | - | (1,058) | (1,058) |
+---------------------------------------+-----------+-----------+---------+
| | | | |
+---------------------------------------+-----------+-----------+---------+
| At 30 June 2010 | 12,887 | 32,093 | 44,980 |
+---------------------------------------+-----------+-----------+---------+
+---------------------------------------+---------+---------+---------+
| Depreciation | | | |
+---------------------------------------+---------+---------+---------+
| At 1 January 2010 | 7,101 | 27,322 | 34,423 |
+---------------------------------------+---------+---------+---------+
| Exchange adjustments | (211) | (1,172) | (1,383) |
+---------------------------------------+---------+---------+---------+
| Charge for the period | 288 | 1,337 | 1,625 |
+---------------------------------------+---------+---------+---------+
| Disposals | - | (985) | (985) |
+---------------------------------------+---------+---------+---------+
| | | | |
+---------------------------------------+---------+---------+---------+
| At 30 June 2010 | 7,178 | 26,502 | 33,680 |
+---------------------------------------+---------+---------+---------+
+---------------------------------------+---------+--------+---------+
| Net book value | | | |
+---------------------------------------+---------+--------+---------+
| At 30 June 2010 | 5,709 | 5,591 | 11,300 |
+---------------------------------------+---------+--------+---------+
| At 31 December 2009 | 6,186 | 6,347 | 12,533 |
+---------------------------------------+---------+--------+---------+
8 CLOSING NET DEBT
+--------------------------------------+----------+----------+----------+
| | At 30 | At 30 | At 31 |
| | June | June | Dec |
| | 2010 | 2009 | 2009 |
+--------------------------------------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
| | | | |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Borrowings - current - overdrafts | (923) | (2,167) | (1,824) |
+--------------------------------------+----------+----------+----------+
| Borrowings - current portion of long | (3,079) | (4,232) | (4,424) |
| term loans | | | |
+--------------------------------------+----------+----------+----------+
| Borrowings - non-current | (56,176) | (93,584) | (66,898) |
+--------------------------------------+----------+----------+----------+
| Cash and cash equivalents | 19,935 | 30,615 | 33,272 |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Closing net debt | (40,243) | (69,368) | (39,874) |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Reconciliation of net cash flow to | | | |
| movement in net debt | | | |
+--------------------------------------+----------+----------+----------+
| | 6 | 6 | Year to |
| | months | months | |
| | to | to | 31 Dec |
| | 30 June | 30 June | 2009 |
| | 2010 | 2009 | |
+--------------------------------------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
| | | | |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Net (decrease)/increase in cash and | (10,924) | 12,702 | 14,917 |
| cash equivalents | | | |
+--------------------------------------+----------+----------+----------+
| Net decrease/(increase) in | 6,471 | (8,633) | 23,094 |
| borrowings | | | |
+--------------------------------------+----------+----------+----------+
| | (4,453) | 4,069 | 38,011 |
+--------------------------------------+----------+----------+----------+
| Exchange | 4,084 | 10,512 | 6,064 |
+--------------------------------------+----------+----------+----------+
| Movement in net debt | (369) | 14,581 | 44,075 |
+--------------------------------------+----------+----------+----------+
| Opening net debt | (39,874) | (83,949) | (83,949) |
+--------------------------------------+----------+----------+----------+
| Closing net debt | (40,243) | (69,368) | (39,874) |
+--------------------------------------+----------+----------+----------+
9 PROVISIONS
+---------------------------------------+---------------+---------+---------+
| | Restructuring | Other | Total |
| | | | |
+---------------------------------------+---------------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 |
| | | | |
+---------------------------------------+---------------+---------+---------+
| | | | |
+---------------------------------------+---------------+---------+---------+
| At 1 January 2010 | 2,281 | 200 | 2,481 |
+---------------------------------------+---------------+---------+---------+
| Exchange adjustments | (97) | (15) | (112) |
+---------------------------------------+---------------+---------+---------+
| Utilised in the period | (1,307) | - | (1,307) |
+---------------------------------------+---------------+---------+---------+
| | | | |
+---------------------------------------+---------------+---------+---------+
| At 30 June 2010 | 877 | 185 | 1,062 |
+---------------------------------------+---------------+---------+---------+
10 PENSIONS
The valuations used for IAS 19 disclosures have been based on the most recent
actuarial valuation at 31 December 2008 updated by KPMG LLP to take account of
the requirements of IAS 19 in order to assess the liabilities of each of the
schemes at 30 June 2010. Assets are stated at their market value at 30 June
2010.
The latest completed actuarial valuation of the scheme was carried out as
at 31 December 2008, using the defined accrued benefit method (the same method
that was used at the previous valuation), by an independent actuary employed by
Barnett Waddingham LLP. The assumptions, which were agreed between the company
and trustees, that have the most significant effect on the results of the
valuation are those related to the rates of return on investments and the rates
of increase in future price inflation and pensions. Over the long term, the
returns on investments backing the scheme's liabilities were assumed to be 5.80%
per annum before retirement and 4.30% per annum after retirement. For pensions
in payment (for both current pensioners and non-retired members) the return on
underlying investments was assumed to exceed future pension increases (in excess
of the guaranteed minimum pension) by 1.55% per annum. Pensions in excess of the
guaranteed minimum pension were assumed to increase at 2.75% per annum. The
valuation showed that the market value of the scheme's assets was GBP63.5
million as at 31 December 2008, which represented 63% of the value of the
benefits that had accrued to members at that date.
+---------------------------------------+------------+--------+--------+
| The financial assumptions used to calculate the liabilities under |
| IAS 19 are: |
+----------------------------------------------------------------------+
| | UK |
+---------------------------------------+------------------------------+
| | 6 months | 6 | Year |
| | to | months | to |
| | 30 June | to | 31 Dec |
| | 2010 | 30 | 2009 |
| | | June | |
| | | 2009 | |
+---------------------------------------+------------+--------+--------+
| Inflation rate | 3.35% | 3.55% | 3.65% |
+---------------------------------------+------------+--------+--------+
| Rate of increase of pensions in | 3.35% | 3.55% | 3.65% |
| payment | | | |
+---------------------------------------+------------+--------+--------+
| Rate of increase for deferred | 3.35% | 3.55% | 3.65% |
| pensioners | | | |
+---------------------------------------+------------+--------+--------+
| Discount rate | 5.50% | 6.45% | 5.75% |
+---------------------------------------+------------+--------+--------+
| | | | |
+---------------------------------------+------------+--------+--------+
| | Netherlands |
+---------------------------------------+------------------------------+
| | 6 months | 6 | Year |
| | to | months | to |
| | 30 June | to | 31 Dec |
| | 2010 | 30 | 2009 |
| | | June | |
| | | 2009 | |
+---------------------------------------+------------+--------+--------+
| Inflation rate | 2.00% | 2.00% | 2.00% |
+---------------------------------------+------------+--------+--------+
| Rate of increase in salaries | 3.00% | 3.00% | 3.00% |
+---------------------------------------+------------+--------+--------+
| Rate of increase of pensions in | 2.00% | 2.00% | 2.00% |
| payment | | | |
+---------------------------------------+------------+--------+--------+
| Rate of increase for deferred | 2.00% | 2.00% | 2.00% |
| pensioners | | | |
+---------------------------------------+------------+--------+--------+
| Discount rate | 4.70% | 6.20% | 5.40% |
+---------------------------------------+------------+--------+--------+
| | | | |
+---------------------------------------+------------+--------+--------+
| The amounts recognised in the balance | | | |
| sheet are determined as follows: | | | |
+---------------------------------------+------------+--------+--------+
| | 30 June | 30 | 31 Dec |
| | 2010 | June | 2009 |
| | | 2009 | |
+---------------------------------------+------------+--------+--------+
| | GBPm | GBPm | GBPm |
+---------------------------------------+------------+--------+--------+
| Present value of defined benefit | 109.2 | 89.9 | 107.3 |
| obligations | | | |
+---------------------------------------+------------+--------+--------+
| Fair value of plan assets | (82.3) | (69.3) | (81.6) |
+---------------------------------------+------------+--------+--------+
| | | | |
+---------------------------------------+------------+--------+--------+
| Net liability recognised in the | 26.9 | 20.6 | 25.7 |
| balance sheet | | | |
+---------------------------------------+------------+--------+--------+
| | | | |
| The amounts recognised in the income | | | |
| statement are as follows: | | | |
+---------------------------------------+------------+--------+--------+
| | 6 months | 6 | Year |
| | to | months | to |
| | 30 June | to | 31 Dec |
| | 2010 | 30 | 2009 |
| | | June | |
| | | 2009 | |
+---------------------------------------+------------+--------+--------+
| | GBPm | GBPm | GBPm |
+---------------------------------------+------------+--------+--------+
| Current service cost | 0.1 | 0.1 | 0.2 |
+---------------------------------------+------------+--------+--------+
| Interest cost | 3.0 | 2.5 | 5.1 |
+---------------------------------------+------------+--------+--------+
| Expected return on plan assets | (2.8) | (2.0) | (4.0) |
+---------------------------------------+------------+--------+--------+
| | | | |
+---------------------------------------+------------+--------+--------+
| Total pension expense included within | 0.3 | 0.6 | 1.3 |
| distribution costs | | | |
+---------------------------------------+------------+--------+--------+
| | | | |
+---------------------------------------+------------+--------+--------+
| Analysis of the movement in the | | | |
| balance sheet net liability | | | |
+---------------------------------------+------------+--------+--------+
| | 6 months | 6 | Year |
| | to | months | to |
| | 30 June | to | 31 Dec |
| | 2010 | 30 | 2009 |
| | | June | |
| | | 2009 | |
+---------------------------------------+------------+--------+--------+
| | GBPm | GBPm | GBPm |
+---------------------------------------+------------+--------+--------+
| Opening | 25.7 | 13.3 | 13.3 |
+---------------------------------------+------------+--------+--------+
| Exchange adjustments | (0.1) | - | - |
+---------------------------------------+------------+--------+--------+
| On-going expense as above | 0.3 | 0.6 | 1.3 |
+---------------------------------------+------------+--------+--------+
| Employer contributions | (1.4) | (1.4) | (2.8) |
+---------------------------------------+------------+--------+--------+
| Actuarial losses recognised as a | 2.4 | 8.1 | 13.9 |
| reserves movement | | | |
+---------------------------------------+------------+--------+--------+
| | | | |
+---------------------------------------+------------+--------+--------+
| Closing | 26.9 | 20.6 | 25.7 |
+---------------------------------------+------------+--------+--------+
The pension expense has been included in distribution costs. The actual return
on plan assets was GBP1.6 million (2009: GBP1.9 million). The retirement benefit
liability at the end of June was GBP26.9 million (2009: GBP20.6 million), an
increase of GBP1.2 million in the liability from 31 December 2009 (GBP25.7
million). This increase reflects a lower than expected return on the UK scheme's
assets and an increase in the liabilities of the Dutch scheme reflecting the
decrease in corporate bond yields in the Eurozone.
11 SHARE CAPITAL AND RESERVES
Purchase of own shares
During the period the company acquired 4,377 of its own shares of 20p each
through the Brammer plc Employee Share Ownership Trust ("the Trust") for an
aggregate consideration of GBP6,076, which has been deducted from shareholders'
equity. The Trust holds the shares in order to satisfy vestings under the
company's performance share plans and share matching plans. During the period
58,629 shares were transferred to directors and senior managers to meet vestings
under these plans.
At 30 June 2010 the Trust held a total 277,634 shares in the company in order to
meet part of the company's liabilities under the company's performance share
plans and share matching plans. The Trust deed contains a dividend waiver
provision in respect of these shares.
Ordinary shares issued
No options were exercised during the period under the group's employee share
option schemes.
The number of ordinary 20p shares in issue at 30 June 2010 was 106,285,588 (30
June 2009: 53,142,794; 31 December 2009: 106,285,588).
Dividends
The final dividend for the year ended 31 December 2009, amounting to
GBP3,816,000, was approved by shareholders at the Annual General Meeting on 18
May 2010 and was paid on 2 July 2010 (2009: GBP2,701,000). In addition, the
directors propose an interim dividend of 2.10p per share (2009: 1.84p per share)
payable on 3 November 2010 to shareholders who are on the register at 8 October
2010. This interim dividend, amounting to GBP2,226,000 (2009: GBP1,377,000) has
not been recognised as a liability in these interim financial statements.
12 RELATED PARTY TRANSACTIONS
Other than the remuneration of executive and non-executive directors which will
be disclosed in the group's Annual Report for the year ending 31 December 2010,
there were no related party transactions during the period.
13 INTERIM REPORT
A copy of the interim report is available for inspection at the registered
office of the company, Claverton Court, Claverton Road, Wythenshawe, Manchester,
M23 9NE and the offices of Citigate Dewe Rogerson Ltd, 3 London Wall Buildings,
London Wall, London EC2M 5SY.
Current regulations permit the company not to send copies of its interim results
to shareholders. Accordingly the 2010 interim results published on 6 August 2010
will not be sent to shareholders. The 2010 interim results and other information
about Brammer are available on the company's website at www.brammer.biz.
14 INTERIM DIVIDEND
Relevant dates concerning the payment of the interim dividend are
+---------------+------------------------------------------------------+
| Record date | 8 October 2010 |
+---------------+------------------------------------------------------+
| Payment date | 3 November 2010 |
+---------------+------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UVVWRRSAWRAR
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